In a letter shared with Capacity, Shah Capital argued that Veon’s stock was underperforming and offered a series of strategic suggestions to improve the company’s fortunes.
In a response letter, seen by Capacity, Veon highlighted its recent operational growth while also reiterating its commitment to creating long-term shareholder value.
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Veon’s share price rose from $29.50 to $30.90 in the 24 hours between Shah Capital's letter and the company’s response.
“Veon remains committed to driving sustainable growth and creating long-term value for all shareholders,” the response letter read. “ The Company is focused on continuing to execute its strategic initiatives, including advancing its strong operating outlook, optimising its capital structure, and maintaining a disciplined approach to capital allocation.”
Shah Capital suggested the company launch a $100 million share buyback program, take brands Jazz, JazzCash, and Kyivstar public, and create a cloud data centre growth strategy as ways to improve Veon’s financial position.
The concerned shareholder suggested that Veon’s share price could rise from $29.50 per share to $160 by 2026 if the company implements a change of course.
In response to Shah Capital’s suggestions, Veon said that the recommendations were being carefully considered.
“Veon appreciates Shah Capital’s insights and its recognition of Veon’s recent operational growth and the ongoing transformation of the business,” the company’s response read.
“While Veon’s share value has more than doubled over the past two years, the company also shares Shah Capital’s assessment that its current share price indicates a potential for further improvement, as Veon positions itself as a leading opportunity for investors seeking growth in frontier markets.”
Veon pointed to recent achievements, including its inclusion in JP Morgan's Emerging Markets Corporate Indices and an upgraded rating of AA from MSCI, positioning it among the "Leaders" in its industry.
The company, which plans to delist from Euronext Amsterdam to consolidate its trading on Nasdaq, also highlighted its Digital Operator strategy (DO1440) as a main driver of growth. Veon is moving its headquarters from its native Holland to Dubai to be closer to what it considers its key markets.
Veon argued that its strategy has helped the company expand its digital services portfolio across finance, healthcare, entertainment, education, and enterprise services.
Addressing Shah Capital's suggestions about taking certain subsidiaries public, Veon said it was “evaluating options to crystallise the value of our businesses... including through initial public offerings of some of our companies when relevant.”
“Veon appreciates the constructive engagement from its shareholders,” the letter concluded. “Our board and management will continue to maintain an open dialogue with all our shareholders as we look to unlock Veon's full potential.”
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